Correlation Between Franklin FTSE and Franklin FTSE

Can any of the company-specific risk be diversified away by investing in both Franklin FTSE and Franklin FTSE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Franklin FTSE and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Franklin FTSE Japan and Franklin FTSE Asia, you can compare the effects of market volatilities on Franklin FTSE and Franklin FTSE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Franklin FTSE with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin FTSE and Franklin FTSE.

Diversification Opportunities for Franklin FTSE and Franklin FTSE

0.52

Correlation Coefficient

Franklin FTSE  Franklin FTSE

Very weak diversification

The 3 months correlation between Franklin and Franklin is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE Japan and Franklin FTSE Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Asia and Franklin FTSE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Franklin FTSE Japan are associated (or correlated) with Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE Asia has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and Franklin FTSE go up and down completely randomly.

Pair Corralation between Franklin FTSE and Franklin FTSE

Given the investment horizon of 90 days Franklin FTSE Japan is expected to generate 0.98 times more return on investment than Franklin FTSE. However, Franklin FTSE Japan is 1.02 times less risky than Franklin FTSE. It trades about 0.15 of its potential returns per unit of risk. Franklin FTSE Asia is currently generating about -0.09 per unit of risk. If you would invest  3,083  in Franklin FTSE Japan on September 5, 2024 and sell it today you would earn a total of  106.00  from holding Franklin FTSE Japan or generate 3.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Franklin FTSE Japan  vs.  Franklin FTSE Asia

Franklin FTSE Japan

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin FTSE Japan are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward-looking indicators, Franklin FTSE may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Franklin FTSE Asia

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin FTSE Asia are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Franklin FTSE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Franklin FTSE and Franklin FTSE

The main advantage of trading using opposite Franklin FTSE and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin FTSE position performs unexpectedly, Franklin FTSE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.

The idea behind Franklin FTSE Japan and Franklin FTSE Asia pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.